The Morning Call
3/6/19
The
Market
Technical
The Averages
(DJIA 25806, S&P 2789) had relatively quiet day. Perhaps the most important technical factor impacting
stocks right now is the standoff at S&P 2800, with the S&P remaining
(slightly) below that level. It clearly
remains the line in the sand for bulls and bears. Follow through.
Volume declined;
breadth was weak.
The VIX was up fractionally,
ending above its prior low. It has now set a double bottom (bad for stocks) but
is still below both MA’s (good for stocks).
The long bond was
up ¼ %, remaining above the support level that it challenged on Friday. However, it still appears to have made a
triple top.
The dollar rose,
finishing right on the upper boundary of the November to present trading range. Its chart looks strong.
GLD was up slightly,
bouncing off a second minor support level and above both MA’s.
Bottom line: the
S&P continues to see saw across the 2800 resistance level. While its inability to hold above 2800 is a
negative, the lack of follow through to the downside is a plus. Directional follow through remains the most
important factor for this chart.
The pin action in TLT, UUP and GLD was
inconsistent.
Tuesday in the
charts.
Fundamental
Headlines
Yesterday’s
data was mixed: month to date retail chain store sales, the February Markit
services PMI and the January/YTD budget deficit were negative while the
February ISM nonmanufacturing index and December new home sales were a plus.
However,
the international stats were surprisingly upbeat for a change: the February EU composite
and services PMI’s were stronger than anticipated as was the February UK
services PMI.
Bottom
line: it was a slow day save for the numbers, so I repeat yesterday’s bottom
line: as long as the economic data doesn’t fall off a cliff, the trade deal
doesn’t explode in Trump’s face and the Fed stays easy, the Market bias should
remain to the upside.
***overnight,
Trump is rumored to be willing to make a China deal that doesn’t include
reforms in China’s industrial policy and IP theft. If so (operative phrase), the question is,
what kind of deal has been priced into the Market? If the answer is, any deal, then the question
becomes, has that been fully priced in?
If the answer is, a deal that includes the aforementioned reforms, then
the question becomes, how disappointed will the Market be? I don’t presume to know the answer.
February
dividends by the numbers.
News on Stocks in Our Portfolios
Brown-Forman (NYSE:BF.B): Q3 GAAP EPS of $0.47 beats by $0.02.
Revenue of $904M (+3.0% Y/Y) misses by $6.71M.
Revenue of $703.7M (+5.9% Y/Y) misses by $15.75M.
Economics
This Week’s Data
US
Month
to date retail chain store sales grew less rapidly than in the prior week.
The
February Markit services PMI came in at 56.0 versus expectations of 56.2.
The
ISM nonmanufacturing index was 59.7 versus estimates of 57.2.
December
new home sales rose 23,000 versus forecasts of a 53,000 decline.
The January
budget surplus was $8.7 billion versus projections of $6.0 billion; however,
the fiscal year to date deficit now stands at $310 billion up from $175 billion
over the same time period last fiscal year.
Weekly mortgage applications
declined 2.5% while purchase applications fell 3.0%.
The February ADP
private payroll report showed an increase of 183,000 jobs versus expectations
of a rise of 180,000; however, the January figure was revised from +231,000 to
+300,000.
The December
trade deficit came in at $59.8 billion versus estimates of $57.6 billion.
International
The
Organization for Economic Cooperation and Development lowered its 2019 global
growth forecast from 3.5% to 3.3% and EU growth from1.8% to 1.0%.
Other
US/China
spot rates on shipping containers near a low.
The
consumer now facing rising debt and interest rates.
As
you know, one of the major economic risks that I list in each week’s Closing
Bell is a vulnerable global banking system wrought primarily by free money
given to them by the central banks plus their management’s greedy and unscrupulous
behavior for which they have been exempt by the political classes of their native
countries. Here is another growing problem.
Return
of the debt limit and sequestration.
Modern
Monetary nonsense.
What
if all our problems are interconnected?
How
monetary policy has impacted the economy.
Trump
appears set to scrap preferential trade treatment of India.
What
I am reading today
North Korea rebuilding a missile
site.
Does
‘just a bit more’ make a difference?
Not
caring is a unique and powerful skill.
The
alternative to QE.
Bill
to end the forever war in Afghanistan (thank God).
In
investing, there are no laws just tendencies.
For
the People Act.
Visit Investing
for Survival’s website (http://investingforsurvival.com/home)
to learn more about our Investment Strategy, Prices Disciplines and Subscriber
Service.
No comments:
Post a Comment